Medium Term Budget Policy Statement: Departments of Education and Health

29 October 2009

Chairperson: Mr E Sogoni (ANC)

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Meeting Summary

The Department of Healthand Department of Educationgave a presentation to the Committee on the priorities in light of the Medium Term Budget Policy Statement. The Department of Health noted that, in order to address the improvement of health outcomes, it had developed a new Ten Point Plan, which included the implementation of a new health insurance plan, improving quality services, revitalisation of physical infrastructure, and strengthening of the research and development programmes. It was constantly reviewing its funding programmes in order to maximise its use of resources. The expenditure results from April to September 2009 were presented. The Department was cutting costs. It was focusing on funding of Occupation Specific Dispensation (OSD). The budget pressures were outlined, and it was noted that the Department, because it sourced much from overseas, had higher inflation costs, but was addressing the point. Members asked whether polio was a problem in South Africa, asked for clarity on the review of the drug policy, questioned whether there was sufficient focus on physical infrastructure improvement, asked when and how the Department was planning to introduce the National Health Insurance Scheme and costing, and questioned what the Department had done in the areas of OSD, as also whether it had the capacity to carry out all mandates if its budget was approved. Members also asked why chronic health conditions were not dealt with, whether the provinces would benefit from adjustments, complaints by municipalities about the unfunded mandates, why procurement was centralised and what the Department had done to prepare for the World Cup. Members also asked why Stellenbosch was chosen for the launch of the TB awareness campaign, and why there had been lack of disclosure by officials from the Department. Only some of these questions were answered.

The Department of Education discussed the adjusted estimates, considering the funds rolled over for operational purposes, HIV/AIDS grants, and Council of Higher Education (CHE) new functions. Unforeseeable, but necessary, expenditure included workbooks for literacy and numeracy for Grade 1 to 6 learners, across Quintile 1-3 schools,an increase in improvement of conditions of service, and the new Ministry for Higher Education. Additional requests not allocated included funding for examinations and assessment, the National School Nutrition programme, and OSD for Educators. Members asked how the Department determined the quintiles for various schools, and whether these were correct, what the Department was doing about sport in schools, whether there were likely to be shortages of workbooks, whether the examination results were likely to be delayed, what was done to improve Early Childhood Development and whether the amounts that South Africa was spending on education were showing real results. Members also asked several questions about the National School Nutrition Programme, why funds had been withheld from some provinces, and motivation of teachers. The Financial and Fiscal Commission commented that more would need to be done to engage with the budget pressures imposed by OSD and that there was a need to further discuss and decide upon learner transport. The restructuring of this Department into Basic and Higher Education would also put pressure on the budget.

Meeting report

Medium Term Budget Policy Statement: Department of Health presentation
Dr Kamy Chetty, Acting Director-General, Department of Health, briefed the Committee on the Department of Health (DOH or the Department) priorities for the future. The DOH addressed the third medium term priority that was announced by Cabinet, which was to improve health outcomes. The Department had developed a new Ten Point Plan. The new Plan included the implementation of a new health insurance plan, improving quality services, revitalisation of physical infrastructure, and strengthening of the research and development programmes. It was constantly reviewing its funding programmes in order to maximise its use of resources.

Dr Chetty discussed the Department’s expenditure results from April to September 2009 and the adjusted estimates for 2009/2010. She said that the DOH had shifted funds within programmes after a review and alignment as a result of the drive by the Finance Minister to cut and save costs from travel and subsistence, conferencing, and consultancy services. For the Medium Term Expenditure Framework (MTEF) it had taken a decision to stabilise the health sector by looking at critical areas, all part of the Ten Point Plan, that were most important. This included a focus on funding of Occupation Specific Dispensation (OSD).

The budget pressures that the DOH was facing included funding for infrastructure, adequate funding of the Comprehensive HIV&AIDS Treatment Plan and the clearing of accruals from the previous year. Health inflation was higher than normal inflation, since much of its equipment needed to be sourced from overseas. Dr Chetty said that the Department was aware of the economic downturn and so it had prioritised with its Ten Point Plan. She said that Provincial Health Departments also had to engage with their provincial treasuries for possible increases in their equitable share allocations. The budget proposals made were preliminary, and there was no pressure on National Treasury to get the funds approved.DiscussionTheChairperson asked whether polio was a problem.

Dr Chetty replied that it was not a problem in South Africa.

Dr P Rabie (DA) said that there were some interesting developments. He asked for clarity on the review of the drug policy. He said that there was degree of misunderstanding between the Department of Health and pharmaceutical companies. He added that the Medical Research Council had previously given an interesting presentation regarding the statistics of HIV/AIDS sufferers and he asked how much the DOH's plan to address the problem would cost.

Mr Swart commented on the Ten Point Plan, noting that at some hospitals there were serious management problems. He said that physical infrastructure should have been looked at more, because the maintenance of hospitals and clinics was not only important to the DOH but it could have created employment. He asked how the Department was planning to implement its MTBS without a National Health Insurance Scheme, and whether it had done any costing regarding that. He referred to OSD and asked if there were any adjustments for doctors, given the shortage of doctors in the country.

Ms R Mashigo (ANC) commented on the National Health Insurance issue, saying that everybody needed better health and this should have been mentioned in the list of priorities, because health insurance encompassed all areas. There should have been signs that the costing of National Health Insurance should have been done already. The budget should have looked at providing quality care to poor people. She asked if the Department of Health had influence over OSD for doctors.

Mr L Ramatlakane (COPE) asked if the listing of priorities was in order. He asked what the Department needed to achieve in its priority of improving the quality of service, which he regarded as most important. The NHI was also a priority, yet the Minister of Finance had said that the Department and Minister were not quite ready to engage with it, and he asked at what stage the Committee would be privy to this information, in order to engage with whether the NHI was the solution to the problems. In light of the recession, he asked what the DOH really needed to carry out its HIV/AIDS programme. He referred to the 'Mother-to-Child' programme, and asked if there was a 50 % rollout or 100% rollout, in terms of people being positively tested. He added that not addressing the issue would have catastrophic effects since more children would be born HIV positive. He asked if the Department had the capacity to carry out its mandate, if it were given the budget it requested. He also asked if the physical infrastructure programme was driven in terms of job creation and infrastructure investment, and who would budget for it, the Department of Health or Department of Public Works. He asked how much of the budget was needed to address dilapidation.

Ms B Ngcobo (ANC) asked why the health therapies were getting a bigger proportion of the budget, and why chronic health conditions were not dealt with in the DOH’s plan. She also asked if provinces would be receiving any funds from the adjustments for 2010. She asked why procurement was becoming centralised, what the rationale was behind the request for funding regarding vacancies, and if the Department of Health had discussed the fundamentals of NHI with its Health Committee.

Mr J Gelderblom (ANC), asked for more clarity regarding the Health Department's preparations for the 2010 World Cup.

The Chairperson said that the issue of savings was mentioned, which the Minister of Finance had stressed, and asked how far the Departments had gone in identifying their excesses.

The Chairperson noted that Members of the Committee were very interested in NHI.

The Chairperson noted that in regard to health care at the local government level, local authorities often complained that they had an unfunded mandate and people felt that local government was best placed to provide certain services. He asked how far the DOH was in resolving the dispute between provincial and local governments.

The Chairperson noted that the issue of OSD was important and needed to be resolved fully. Issues around capital expenditure, national adjustment estimates, and the Western Cape continued to be a problem that needed to be addressed.

The Chairperson asked why Stellenbosch was chosen to launch a R2 million campaign for TB awareness.

The Chairperson said that the Committee had received a report from the Public Service Commission that said that only 9% of forms for disclosure for the Department of Health were responded to. He asked what should be done about these senior government officials who did not respond, especially since Government was trying t remove corruption.

Dr Chetty said that the issue around the review of drug policy was comprehensive and the Minister was very active, engaging with pharmacists. This was not related to the dispensing fee for pharmacists. The issue was almost resolved, and the Department was continuously engaging with the pharmacists.

Dr Chetty then addressed the questions around AIDS. The funds required to address the AIDS epidemic were shown in the presentation. The conditional grant did not cover the total expenditure. DOH was trying to work out the true costing. There was more that was being spent than the conditional grant. This was an active exercise, so it was hard to give definite figures. Estimates would depend on treatment protocols. She suggested that the Committee should get a special presentation regarding costing according to protocols. This was a priority programme of Government.

Dr Chetty also noted that the priority of improving the quality of hospitals related to management of these facilities. The Minister had announced that he would address incompetence at managerial levels. The hospital revitalisation programme had substantially more funds allocated for the provinces, and there was a lot of under spending at the provincial level.

The prevention of mother to child transmission was one of its highest priorities. The Government and Department were aiming to see a situation where no child was born HIV positive. The major question was how they could have improved its capacity to implement its target.

The costing of the NHI encompassed the entire Ten Point Plan. In order to implement an NHI the country needed a stronger public health system overall. The funds for all the various programmes were the funds for the implementation of the NHI.

Dr Chetty then dealt with the questions around the personnel issues. OSD was not reflecting the carry-through costs, as the doctors and pharmacists had already been dealt with. There were reviews that were going to take place in 2010. Previous budgets would have shown the costs for OSD for doctors. OSD for occupational therapists had not yet started. Figures would, in the future, depend on the implementation programme and budget.

Dr Chetty noted that in regard to disclosures, the DOH had followed up on some of the reporting, and it was found wanting. She wrote a letter to those who did not submit their disclosures, giving them a limited amount of time to submit their disclosures.

In regard to the infrastructure questions, Dr Chetty noted that there were job creation opportunities with the physical infrastructure maintenance and revitalisation programme. There was a huge backlog that had been addressed. A percentage of the budget went towards maintenance. DOH looked at centralised procurement for certain specialized programmes where it could benefit from economies of scale.

Dr Chetty then dealt with the questions about the local government, pointing out that the National Health Act stated that the local level was responsible for municipal health services, and where municipalities had the capacity, then those service functions would be delegated.

DOH had written a letter to National Treasury, identifying areas of expenditure where DOH felt that it could cut down. DOH had been very active in reviewing its cost-saving measures, on a continuous basis.

The Chairperson commented that the Committee would champion the issue of savings on account of the reduced budget, but without constraining service delivery too much.

Department of Education (DOE) presentationThe Chairperson invited the Department of Education to make its presentation, noting that South Africa was facing a huge problem with literacy levels. Education was prioritised by Government because low literacy and numeracy levels contributed to other problems like unemployment and crime. He said that it was important to figure out how to use the budget appropriately to ensure that Education problems were addressed.

Mr Duncan Hindle, Director-General, Department of Education, briefed the Committee on the Department of Education (DOE or the Department) 2009 Medium Term Budget Policy Statement (MTBS). He discussed its adjusted estimates, considering the funds rolled over for operational purposes, HIV/AIDS grants, and Council of Higher Education (CHE) new functions. Unforeseeable, but necessary, expenditure included workbooks for literacy and numeracy for Grade 1 to 6 learners, across Quintile 1-3 schools,an increase in improvement of conditions of service, and the new Ministry for Higher Education.

Mr Hindle discussed his Department's additional requests that were not allocated in the MTBS for 2009/2010. These included funding for examinations and assessment, the National School Nutrition programme, and OSD for Educators. He presented the DOE’s requests for additional funding for the following categories: Examination and Assessment; Continuous Professional Development; South African Council for Educators (SACE), and increasing the capacity of institutions and people. DiscussionDr Rabie asked how successful the school nutrition programme was, and if it was possible to implement it in rural areas.

Mr Swart asked how the Department determined the quintiles for various schools.

Mr Swart asked if any provision was made for the introduction of sport in schools.

Mr Hindle noted that schools should have a decent sports facility. It was a planning issue. Teachers had pledged two of their afternoons per week to coaching sports.

Mr Gelderblom asked if there would be a shortage of workbooks for the following year, and he also asked if its examination request that was not approved would have any effect on the results of 2009.

Mr Hindle noted that the announcement for examination results were put into place because of the previous Y2K scare. DOE was confident that the results would be out in time.

Ms Mashigo asked how DOE was making provisions to improve Early Childhood Development (ECD), and for clarity on the issue of workbooks, and if this would implicate negatively on the Learner Teacher Support Medium, which also included books.

Mr Hindle responded that DOE was working very hard to ensure that there was no shortage of workbooks. There were various difficulties prevalent, including paper shortages. These workbooks were designed specifically for learners. The workbooks would not take away from funds for Learner/Teacher Support Materials. Provincial budgets were not adjusted in any way.

In regard to ECD, he clarified that ECD referred to pre-school development. More teachers were being trained in this category, so more children were benefiting. The DOE’s focus was primarily on Grade R, and its target was to have every appropriately aged child in Grade R schooling by 2014. There were important steps to make sure that children were getting a good pre-school education.

The Chairperson said that South Africa spent more on education than any other country in Africa, but still had the lowest education outcomes. He asked how the Committee could be certain that what was being proposed was going to assist the solution.

Mr Hindle responded that it was very important to look at the performance of education institutions in the context of poverty and inequality. It would not be fair to try to judge South Africa's performance without understanding the other issues affecting the country, nor to take differing circumstances into account when doing comparisons.

The Chairperson noted that the National School Nutrition Programme (NSNP) was an important topic. It was shown in the first quarterly report that funds were withheld from Free State and Mpumalanga, and there needed to be clarification on this, because children would have been deprived.

Mr Hindle said that the School Nutrition programme had a number of benefits. Attendance and motivation of learners was enhanced. The average cost of feeding each learner was R2 per day, so there were more challenges ahead. There was potential for abuse of this programme. There were measures to reduce the chances of corruption. Abuse of the programme usually happened when there were large orders. Mr Hindle noted that There was a lot of research going on around the introduction of vitamins and minerals to the programme.

Mr Hindle noted that the funds that were withheld from provinces were withheld on a temporary basis. If a province had not prepared a business plan which was compliant with its plan then the Department would withhold the transfer of funding until it had complied.

The Chairperson noted that the DOE should have corrected the conditions relating to quintiles. Former model C schools were filled up with children from the townships. There was a need to spread the balance.

Mr Hindle noted that as long as any affirmative action policy was in place, there had to be some kind of ranking for schools. This involved looking at the relative wealth of schools, including the wealth of the community around the schools. This put them into quintiles. Every school had the right to have its quintile status reassessed. Ironically, schools now competed to be the poorest. There was some debate about removing the ranking systems of quintile schools.

Many teachers that the Chairperson had spoken to were demotivated, and they were struggling to find work. Teachers were an important part of the education system.

Mr Hindle noted that on the previous evening, DOE had hosted the President at its National Teachers Awards. These teachers represented the wide range of teachers were incredibly dedicated and hard-working. There was a need to look at the statistical data. De-motivation was overplayed. The performance-related pay under the OSD was intended to ensure that the best teachers got the best pay, so they would not be not de-motivated by thinking that they were not being rewarded properly for their performance.

Mr Bongani Khumalo, Deputy Chairperson, Financial and Fiscal Commission, said that the areas around OSD were well considered. It would however put pressures on its budget. There would be a need to engage with it to understand that it was more at a provincial level than a national level.

Mr Khumalo also commented that learner transport was a key area. The Commission had been specifically requested by Parliament to look into it. There was an issue between the Department of Education and the Department of Transport, and there were discussions but it should be addressed further.

Mr Khumalo noted that the restructuring of the Education Department into Basic and Higher Education related to funding and function. The intervening period between shifting of functions and restructuring would be difficult.

The Chairperson agreed that the ECD was a very important part of the Education system.

He congratulated the Department on having a school from a rural area in the top hundred schools ranking.